If the “market value” of your assets, to be distinguished from your equity in the asset, exceeds $100.000.00, then you should consider executing a Revocable Living Trust. If the value of your assets is under $100.000.00 then you should execute a Will to protect your estate from probate. If you create a Revocable Living Trust, you also need a Last Will and Testament which is referred to as a Pour-Over Will for any items that just in case you inadvertently leave something out of your Revocable Living Trust, or need a Guardianship provision.
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Revocable Trust
A revocable trust is a trust that can be altered or canceled. During the life of the trust, income earned is distributed to the settlor (also known as the grantor). After the settlor’s death the remaining property is transferred to the beneficiaries. This type of agreement provides flexibility and income to the living settlor. The settlor is able to adjust the provisions of the trust and earn income, all the while knowing that the estate will be transferred upon their death. A revocable trust is also known as a “living trusts,” “inter vivos trust,” or “loving trust.”
How You Create a Revocable Trust
A revocable trust is created during your lifetime. You create the revocable trust by identifying the settlor, the trustee, the beneficiaries, and transferring property into the trust. The settlor is the person who is creating the trust and funding the trust. The trustee is the person who has control of the trust. Beneficiaries are those who will receive assets from the trust. The property you transfer is called “res.”
The Settlor
The person who creates a revocable trust is generally called the trust “settlor.” The settlor is the entity that establishes a trust. The settlor goes by several other names: donor, grantor, trustor, and trustmaker. Regardless of what this entity is called, its role is to legally transfer control of an asset to a trustee, who manages it for one or more beneficiaries. With a revocable trust, the settlor may also be the beneficiary, the trustee, or both.
The Trustee
The trustee is a person or firm that holds and administers property or assets for the benefit of a third party. Trustees are trusted to make decisions in the beneficiary’s best interests and often have a fiduciary responsibility to the trust beneficiaries. The trustee will receive trust property for the benefit of the beneficiary.
Beneficiary
The beneficiary is someone who is eligible to receive distributions from the trust. Beneficiaries are either named specifically in the trust document or have met the stipulations that make them eligible for whatever distribution is specified.
Avoiding Probate
A revocable living trusts are very useful in that they avoid the burdensome probate process. By creating and implementing a living trust you can avoid a probate. At death, the trust assets are distributed according to the settlor’s instructions written in the trust. The successor trustee, person or entity who manages the trust after the settlor’s death, will distribute all assets without involvement by a California court.
Privacy
When you create a trust, you maintain your privacy by creating a trust. The provisions of a trust and instructions to the trustee are not be disclosed to others.
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For more information about trusts or associated issues click on one of the following links:
Estate Planning – California Attorney – Lawyer Consultation
California Probate – California Attorney – Lawyer Consultation
Avoiding Probate – California Attorney – Lawyer Consultation
